Tuesday, December 17, 2019

Goldman Sachs is first big US bank to rule out loans for Arctic drilling

The Prirazlomnaya offshore ice-resistant oil-producing platform is seen in
the Pechora Sea, Russia, on May 8, 2016. It is the world's first
operational Arctic rig that processes oil drilling, production, storage,
end product processing and loading. Getty Images

Golddman Sachs(GS) is the first big US bank to say it won't finance new oil projects in the Arctic.

On
Sunday, the bank announced a raft of changes to its environmental
policies, including a pledge not to finance drilling in the Arctic. The
restrictions also rule out projects in Alaska's Arctic National Wildlife
Refuge, which President Donald Trump has sought to open to development.

The
funding freeze extends to new thermal coal mine and power plant
development around the world, as well as projects that "significantly
convert or degrade a natural habitat," Goldman Sachs said on its
website.

The bank also announced a
commitment to invest $750 billion over the next 10 years into areas that
focus on climate transition and inclusive growth.

According
to The Sierra Club, more than a dozen of the world's largest banks have
made similar commitments to stop drilling in the Arctic, including UniCredit(UNCFF), Royal Bank of Scotland(RBS) and Barclays(BCS).

The
Arctic is warming at a rate of almost twice the global average, leading
to rising sea levels, changes in climate and rainfall patterns and more
severe weather events, according to the World Wildlife Fund.

Caribous are seen at the Arctic National Wildlife Refuge in Alaska.

"Goldman
Sachs is right to recognize that destroying the Arctic Refuge would be
bad business. We hope other American banks will follow their lead," Ben
Cushing of The Sierra Club said in a statement.

David
Solomon, the CEO of Goldman Sachs, meanwhile called on governments to
put a price on the cost of carbon in a Financial Times op-ed.

"There is not only an urgent need to act, but also a powerful business and investing case to do so," Solomon said.

The
company said it will "phase out" financing of thermal coal mining
companies that do not have plans to diversify away from coal.

In October, the Sierra Club and Rainforest Action Network were part of a wider coalition that urged Goldman Sachs, JPMorgan Chase(JPM) and other leading investment banks to withdraw financial support for the Saudi Aramco IPO.

According to the coalition, the state-owned oil company, which listed Goldman as a joint financial adviser on its public market debut, is "the world's largest corporate emitter of carbon dioxide."